SAP AG, a Germany-based business-software giant, announced that it has agreed to acquire Khimetrics Inc., an Arizona-based provider of software for retailers, for an undisclosed sum.

Khimetrics makes software that helps retailers analyse how to price and position items, forecast profits and devise long-term sales strategies. SAP said the acquisition would allow it to expand its market position in the retail software industry.

It's a step in the right direction, as it definitely fills a gap that SAP didn't have, but SAP still needs to fill in more gaps in its retail solution. Noha Tohamy, principal analyst, Forrester Research Inc.

The merger is on the heels of SAP rival Oracle Corp.'s successful July acquisition of ProfitLogic, which produces similar demand intelligence software for pricing, markdown and merchandising analysis. ProfitLogic's expertise has been mainly with clothing retailers.

Retailers have traditionally used best-of-breed software to conduct analysis and run IT systems, according to analysts. But the SAP acquisition could signal the end of best-of-breed in the retail market, said Noha Tohamy, principal analyst at Cambridge, Mass.-based Forrester Research Inc.

Source: 1, 2Prashanth RaiTag(s):M&A, SAP.